Another question about directors' pensions and the "wholly and exclusively" thing

artyboy

With the OPs approach here, I think this thread is fast heading to Locksville... in the meantime, there's always popcorn...

fizio

Not really following all the to and fro here but my accountant is fine with a 50% shareholding director getting a whacking great employers contribution regardless of salary and significance of their contribution to the business - obviously only if the company makes more than the contribution in profit 

Grumpy_chap

fizio said:

Not really following all the to and fro here but my accountant is fine with a 50% shareholding director getting a whacking great employers contribution regardless of salary and significance of their contribution to the business - obviously only if the company makes more than the contribution in profit 

And that seems to be the very crux of the matter here:

mrodent33 said:

I received several 00s of 000s of £ as an inheritance, and most of this is now sitting in GIA accounts. I have paid myself, through the company, a director's SIPP contribution of £60k, by lending the company a lot of my own money.

The company will probably never make a profit again, due to future such SIPP payments, and will probably never pay me a dividend again (I'm 63). 

The OP has taken specific action to lend money to the company (Director Loan to the Ltd Co) to make the pension contributions in the full knowledge that the Ltd Co will never be able to repay the loan back to the Director.  As such, at some future point in time, the company will be wound up with debts unpaid and all tax is avoided.

This is evidently a non-natural act with no purpose for the company and the sole outcome of this chain of events is tax avoidance verging on tax evasion.

The fact the OP has created this new thread without reference to their prior comments potentially is the give away that the OP knows that what they have done really risks unwinding in a messy way.
https://forums.moneysavingexpert.com/discussion/6561558/most-tax-efficient-wage-for-single-director-owner-employee-micro-company#latest

DRS1

Grumpy_chap said:

fizio said:

Not really following all the to and fro here but my accountant is fine with a 50% shareholding director getting a whacking great employers contribution regardless of salary and significance of their contribution to the business - obviously only if the company makes more than the contribution in profit 

And that seems to be the very crux of the matter here:

mrodent33 said:

I received several 00s of 000s of £ as an inheritance, and most of this is now sitting in GIA accounts. I have paid myself, through the company, a director's SIPP contribution of £60k, by lending the company a lot of my own money.

The company will probably never make a profit again, due to future such SIPP payments, and will probably never pay me a dividend again (I'm 63). 

The OP has taken specific action to lend money to the company (Director Loan to the Ltd Co) to make the pension contributions in the full knowledge that the Ltd Co will never be able to repay the loan back to the Director.  As such, at some future point in time, the company will be wound up with debts unpaid and all tax is avoided.

This is evidently a non-natural act with no purpose for the company and the sole outcome of this chain of events is tax avoidance verging on tax evasion.

The fact the OP has created this new thread without reference to their prior comments potentially is the give away that the OP knows that what they have done really risks unwinding in a messy way.
https://forums.moneysavingexpert.com/discussion/6561558/most-tax-efficient-wage-for-single-director-owner-employee-micro-company#latest

Actually the OP says most of the loan has been repaid.  From his reply to @poseidon1

"I have indeed been getting the company to repay large amounts of the 24-25 loan (from me) made to enable the 60k pension contribution made in 24-25: in fact it's almost been paid off. It is also wrong to suppose the company is not now making any profits: as a general matter, it appears perfectly legitimate to hope that, from now on, the company makes minimal profit (particularly after **taking allowable director pension contributions into account**, whatever "allowable" means in this context)."

Grumpy_chap

DRS1 said:

Actually the OP says most of the loan has been repaid.  

Thanks - I'd missed that update.

DRS1

Grumpy_chap said:

DRS1 said:

Actually the OP says most of the loan has been repaid.  

Thanks - I'd missed that update.

Easy to do. This thread has been a bit of a mess.